Income Tax Appellate Tribunal - Delhi
Sunglow Overseas Pvt. Ltd., New Delhi vs Acit, New Delhi on 14 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
Before Sh. N. K. Saini, AM and Sh. K. N. Chary, JM
ITA No. 2156/Del/2015 : Asstt. Year : 2006-07
Sunglow Overseas Pvt. Ltd., Vs Asstt. Commissioner of Income Tax,
M-11, Middle Circle, Central Circle-32,
Connaught Circus, New Delhi-110001
New Delhi-110001
(APPELLANT) (RESPONDENT)
PAN No. AABCS5852N
Assessee by : Sh. Ajay Bhagwani, CA
Revenue by : Sh. S. S. Rana, CIT DR
Date of Hearing : 05.04.2018 Date of Pronouncement : 14.05.2018
ORDER
Per N. K. Saini, AM:
This is an appeal by the assessee against the order dated 29.12.2014 o f ld. CIT(A)-XXX, New Delhi.
2. Following grounds have been raised in this appeal:
"1. That in the circumstances of the case the assessment made u/s 153A by the Assessing Officer, was bad on facts and in law on the grounds that -
i) as per Panchnama no material whatsoever, was seized in the course of search u/s 132 of the Act on the assessee on 07.12.2010 and therefore the assessment ought to have been on the income assessed "as per original assessment made u/s 143(3) on 31.12.2008, as reduced by the order of the CIT(A) vide his order in appeal no.431/Del/2013 dated 28.12.2012", and 2 ITA No. 2156/Del/2015 Sunglow Overseas Pvt. Ltd.
ii) the utilization of the material seized in the course of search on 15.11.2007 on M/s BPTP Ltd (and not on the assessee) was not permissible in the presen t assessment in as much as it is proved/evidenced from AO's own record that no material was found in the course of aforesaid search, which belonged to the assessee, and because of which fact no action was taken u/s 153C in the hands of the assessee and it would amount to revisiting the matter on same facts, which is not permissible. Besides use of such seized material was barred by limitation as per section 153- B of I.T. Act.
2. That without prejudice, the CIT(A) erred in confirming the disallowance of Rs.8,53,500/- made u/s 40A(3) because the same was not claimed as deduction by the assessee.
3. That without prejudice, the CIT(A) erred in confirming the disallo wance of Rs.30,000/- on account of Additional Payment made as the same was not claimed as deduction by the assessee.
3.1 That in any case vide his own order dt. 28.12.2012 in appeal no. 431/Del/2013 the CIT(A) himself had deleted this disallowance.
4. That without prejudice, the CIT(A) erred in confirming the addition on account of interest on post dated cheques of Rs.15,29,735/- allegedly paid in cash outside the books of account which he erroneously held that the same was confirmed vide his own order dt. 28.12.2012 in appeal no. 431/Del/2013.
5. That CIT(A) erred in dismissing the all grounds of appeal by wrongly stating "that the assessing officer in present assessment order, has restricted the addition to the extent of addition confirmed in first appeal in earlier proceeding."
3 ITA No. 2156/Del/2015Sunglow Overseas Pvt. Ltd.
6. That the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXX, Ne w Delhi are bad in law and void ab initio.
7. The appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal."
3. As regards to Ground No. 2 & 3, the ld. Counsel for the assessee at the very outset stated that this issue is covered in favour of the assessee vide order dated 14.09.2015 in assessee's own case in ITA No. 1734/Del/2013 for the assessment year 2006- 07 (copy of the said order was furnished which is placed o n record). The ld. CIT DR although supported the orders of the authorities below but could not controvert the aforesaid contention of the ld. Counsel for the assessee.
4. We have considered the sub missions of both the parties and perused the material available on record. It is noticed that a n identical issue having similar facts has been adjudicated by the ITAT Delhi Bench "G", New Delhi in assessee's own case in ITA No. 1734/Del/2013 for the assessee year 2006-07 wherein the relevant findings have been given in para 21 of the order dated 14.09.2015 which read as under:
"21. After considering the submissions of both the parties and the material available on the record, it is noticed that an identical issue having similar facts was a subject matter of adjudication by the ITAT Delhi Bench 'H', New Delhi in the case of Westland Developers Pvt. Ltd. Vs ACIT in ITA No. 1752/Del/2013 for the assessment year 2006-07 wherein relevant findings have been given in para 10.10 of the order dated 22.08.2014 which read as under:4 ITA No. 2156/Del/2015
Sunglow Overseas Pvt. Ltd.
"10.10. We have also taken ourselves through the judgment of the Jurisdictional High Court in the case of CIT Vs Industrial Engineering Projects Pvt. Ltd. (cited supra) which has been relied upon before us for the proposition that reimbursement of expenses cannot be treated to be a Revenue receipt. How the judgment of the Apex Court in Tuticorin Alkali Chemicals & Fertilizers is applicable to the facts of the present case has not been set out in the order of the authorities nor has the Ld. DR been able to address the applicability of the said judgment to the issue at hand.
We have taken ourselves through the said judgment and seen that it proceeds on entirety different facts and circumstances and has no applicability to the facts of the present case. Consequently, it is seen that from the ratio of the judgments relied upon before the CIT(A) and also before us which have been discussed in the earlier part of this order no arguments have been advanced by the Revenue so as to contend how they are not applicable to the case at hand, no distinguishing fact, circumstance or position of law has been relied upon so as to come to a contrary finding than the one arrived at. Accordingly on a consideration of the peculiar facts and circumstances of the case and the judgments relied upon considering the relevant provision of the Act namely Section 40A(3), we hold for the detailed reasons given hereinabove that Section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatable to the addition has been claimed and the assessee has successfully demonstrated that the payment were re- imbursement made by CWPPL. Accordingly Ground No-4 is allowed."
5. So, respectfully following the aforesaid referred to order, this issue is decided in favour of the assessee.
6. Next issue vide Ground No. 3 relates to the confirmation o f disallowance of Rs.30,000/- on account of additional payment made. As regards to this issue, the ld. Counsel for the assessee submitted that it is also covered vide aforesaid referred to order dated 14.09.2015 in ITA No. 1734/Del/2013 in assessee's own case 5 ITA No. 2156/Del/2015 Sunglow Overseas Pvt. Ltd.
and the relevant findings are given in para 17 of the said order. The ld. CIT DR could not controvert the aforesaid contention of the ld. Counsel for the assessee.
7. After considering the sub missions of both the parties, it is noticed that an identical issue has been adjudicated in the aforesaid referred to order dated 14.09.2015 and the relevant findings have been given in para 17 which read as under:
"17. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts has already been adjudicated in the aforesaid referred to case of M/s Westland Developers Pvt. Ltd. vide order dated 22.08.2014 in ITA No. 1752/Del/2013 wherein the relevant findings have been given in para 13 which read as under:
"13. We have heard the rival submissions and perused the material available on record. The case law relied upon by the parties has been taken into consideration. On a consideration of the same we are of the view that since in the facts of the present case the material issue is that the said expenditure was never claimed as assessee's business expenditure the occasion to make a disallowance of the same does not arise. On this fact there is no dispute as admittedly the expenditure was not claimed as an expense by the assessee and consequently has not been routed through its P&L A/c. In the circumstances, the occasion to make an addition of the same by way of a disallowance in these peculiar facts and circumstances of the case does not arise. The reasoning and finding given while considering the arguments qua Ground No-4 would fully apply here also. The difference that here the entire amount is added u/s 37 as opposed to part of the expenditure disallowed u/s 40A(3) is not so material as the finding is arrived at taking cognizance of the material fact that herein also no such claim of expenditure has been made. The fact that the additional payments were warranted in order to avoid potential disputes amongst the claimants of the land holding which have been passed through to the land holders from generation to generation wherein there may be informal arrangements of ownership and or the payments were for commercial expediency to facilitate peaceful possession and registration of the land holding; where by the time Registry was made 6 ITA No. 2156/Del/2015 Sunglow Overseas Pvt. Ltd.
the landholders felt a higher payment was necessitated due to increase in value are issues which are not required to be addressed in the present proceedings. GroundNo-3 on the facts available on record considering the judicial precedent referred to in detail while deciding Ground No-4 has to be decided in favour of the assessee. Ground No.3.1 and 3.2 as such need not be adjudicated in the present case. Qua Ground No-2 the observation and findings to the extent that general observations based on material found during BPTP group of companies which were searched does not have any bearing. The material not having been confronted to the assessee in the face of the argument that even otherwise has no nexus has not been rebutted by the Revenue by any evidence or argument as the thrust of the parties attention remained focused on addressing the additions made. In the afore-mentioned peculiar facts and circumstances taking cognizance of the fact that in the facts of the present case the CIT(A) makes a reference to facts not borne out from the record namely recording of statement of some patwari and Chotu Ram the support drawn by the CIT(A) in sustaining the addition is found to be misplaced. However since the specific additions under challenge have been addressed on facts and the legal position thereon Ground No-2 in terms of the above observation is left open for want of necessary evidences and arguments based on evidences."
8. So, respectfully following the above said order dated 14.09.2015 in assessee's own case, this issue is also decided in assessee's favour.
9. Vide ground nos. 4 & 5, the grievance of the assessee relates to the confirmation of addition on account of interest on post dated cheques a mounting to Rs.15,29,735/-. As regards to this issue, the ld. Counsel for the assessee submitted that it is also covered in favour of the assessee vide order dated 14.09.2015 in ITA No. 1367/Del/2013 for the assess ment year 2007-08 in assessee's ow n case. The ld. CIT DR although supported the order of the authorities below but could not controvert the aforesaid contentio n of the ld. Counsel for the assessee.
7 ITA No. 2156/Del/2015Sunglow Overseas Pvt. Ltd.
10. After considering the sub missions of both the parties, it is noticed that this issue was decided in favour of the assessee in assessee's own case in ITA No. 1367/Del/2013 for the assessment year 2007-08 wherein the findings given in the order dated 31.10.2014 in ITA Nos. 1674 & 1765/Del/2013 for the assessment year 2008-09 in the case of M/s IAG Promoters and Developers Pvt. Ltd. have been followed. The relevant findings have been given in the said order dated 14.09.2015 in para 11 & 12 read as under:
"11. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts has already been adjudicated by the ITAT Delhi Bench 'C', Ne w Delhi in the case of ACIT Vs M/s IAG Promoters and Developers Pvt. Ltd. (supra) wherein vide order dated 31.10.2014, the relevant findings are given in para 5 which read as under:
"5. We have heard the arguments of both the sides and perused relevant material placed before us. At the outset, the ground raised by the Revenue is misconceived because learned CIT(A) has not deleted the addition of Rs. 5,06,625/- but has only directed to recalculate the interest. We have carefully gone through the order of the learned CIT(A) and also the submissions of both the parties and we do not find any infirmity in the order of the learned CIT(A). After examining the loose papers seized at the time of search at the assessee's premises. It was noticed that interest is paid on the PDCs only during the period of extension of PDCs and, therefore, he directed the Assessing Officer to recomputed the interest on PDCs at the time of extension of the PDCs. He has further observed that if it is not possible to work out the extension of PDCs in each case, then the Assessing Officer is directed to recomputed interest on PDCs after six months from the date of issue of the PDCs. Therefore, the ground of appeal of the Revenue that the CIT(A) deleted the addition of Rs. 5,06,625/- made by the Assessing Officer on account of interest on PDCs is factually incorrect and contrary to the order of the CIT(A). The CIT(A) directed to recalculate the 8 ITA No. 2156/Del/2015 Sunglow Overseas Pvt. Ltd.
interest on PDCs and there was a sound logic for such direction. His direction is based on material found and seized at the time of search. In vie w of the above, we do not find any justification to interfere with the order of learned CIT(A) in this regard and accordingly, we reject ground No. 1 of the Revenue's appeal."
12. Since the facts of the present case are identical to the facts involved in the aforesaid referred to case of M/s IAG Promoters and Developers Pvt. Ltd. So, respectfully following the aforesaid referred to order dated 31.10.2014, we do not see any valid ground to interfere with the findings given by the ld. CIT(A). Accordingly, we do not see any merit in the grounds of the assessee as well as the department, on this issue."
11. So, respectfully following the aforesaid order dated 14.09.2015, the impugned addition made by the AO and sustained by the ld. CIT(A) is also deleted.
12. No other ground was argued before us.
13. In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 14/05/2018) Sd/- Sd/-
(K. N. Chary) (N. K. Saini)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 14/05/2018
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5.DR: ITAT
ASSISTANT REGISTRAR